At a glance
- The buyer has not been identified, but reporting in the Chronicle and the San Francisco Standard suggested it could be Seven Equity Group, a New York firm that specializes in repositioning distressed retail and mixed-use properties.
- The Centre carries a $558 million mortgage that Deutsche Bank and JPMorgan Chase originated in 2016 for Unibail-Rodamco-Westfield and Brookfield Properties, the Standard reported.
- The property is now believed to be valued at $130 million, less than a quarter of the 2016 loan and a gap of roughly $428 million.
A buyer has been found for the vacant San Francisco Centre, a 1.2 million-square-foot retail property in downtown San Francisco, the San Francisco Chronicle first reported.
The buyer has not been identified, but reporting in the Chronicle and the San Francisco Standard suggested it could be Seven Equity Group, a New York firm that specializes in repositioning distressed retail and mixed-use properties. Seven Equity's bid was selected from a pool of potential buyers after a prior deal to acquire the Centre collapsed in July.
The Centre carries a $558 million mortgage that Deutsche Bank and JPMorgan Chase originated in 2016 for Unibail-Rodamco-Westfield and Brookfield Properties, the Standard reported. Both sponsors defaulted on the debt last year, leading to foreclosure, and a group of bondholders that had previously bought the debt position now controls the property.
The property is now believed to be valued at $130 million, less than a quarter of the 2016 loan and a gap of roughly $428 million.
For allocators pricing other distressed urban retail debt, the working number is 4.3 times: the 2016 mortgage against the property's believed value. That ratio suggests a sale at the believed value would not cover the loan, which is the comparison to run against other defaulted retail collateral before bidding.
Reported by the Sectors desk from Connect CRE, San Francisco Chronicle and San Francisco Standard. Published . Corrections